Post navigation

Motability row sparks anger and demand to use huge reserves to support customers

By John Pring Disability News Service 15th February 2018

Disabled campaigners have reacted to the political row over the Motability car scheme by calling for the organisation that runs it to use part of its huge financial reserves to increase support for disabled people.

Details emerged in a newspaper last week of the “grotesque” levels of pay and bonuses awarded to senior executives of Motability Operations (MO), the company that runs the scheme on behalf of the Motability charity*, and its reserves of £2.4 billion.

A series of investigations and inquiries have now either been requested or launched by MPs and work and pensions secretary Esther McVey.

The Commons work and pensions committee and the Treasury committee have announced a joint inquiry, with an evidence session likely to take place on 5 March.

But McVey has also asked the National Audit Office (NAO) to consider an investigation, while the Treasury committee has asked the Financial Conduct Authority (FCA) if there are “any issues relating to Motability that have required investigation in recent times”.

The Charity Commission has also been asked for its opinion.

Last year, it reviewed the charity’s financial accounts and its relationship with MO.

It said in a statement: “That review did not identify regulatory concerns about the charity’s governance or its relationship with the commercial company.

“It is not for the commission to comment on the pay of the CEO of a large non-charitable commercial company.

“However, we have made clear to the trustees of the charity Motability that the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity.

“These reputational issues are for the trustees to manage.”

It also said that it had viewed the level of reserves held by MO to be “cautious” and that it had “agreed with the charity, as part of its oversight of the scheme, that it would ensure that this matter is kept under continuous review”.

McVey told MPs that she believed the Charity Commission should carry out another review of the financial relationship between the Motability charity and Motability Operations.

She told MPs that, when minister for disabled people in 2013, she had persuaded MO to use some of its reserves to pay for “transitional support”.

PIP was introduced by McVey when she was minister for disabled people in April 2013 and led to tens of thousands of people losing their Motability vehicles, with figures last year suggesting that about 900 customers every week were having to return their cars.

McVey told MPs: “Motability was set up 40 years ago, with cross-party support. It has done much good in that time, but today, anybody who looked at the size of the reserves and pay packages would question the direction that Motability has taken in allowing that to happen.”

Labour MP John Mann, who had raised the issue in parliament, called on McVey to order an urgent review, and he described the levels of reserves and executive pay as “grotesque”.

Labour’s shadow employment minister, Margaret Greenwood, said: “The news that the chief executive of Motability Operations Group plc [Mike Betts] took home £1.7 million last year and that the group is sitting on reserves of £2.4 billion has shocked people around the country.

“Particularly shocked are disabled people, 51,000 of whom, according to Motability’s own figures, lost access to the scheme last year after being reassessed for their personal independence payment.

“More than 3,000 were reinstated on appeal, but many lost their car in the meantime.”

Disabled activists have this week raised concerns about the size of MO’s reserves and its executive pay.

Ian Jones, co-founder of the WOWcampaign, said: “Motability CEO Mike Betts seems to think it is OK to overcharge disabled people for the provision of cars, vans and wheelchairs that keep them mobile and independent whilst building up billion pound cash surpluses and other fixed asset reserves that should be used to help disabled people now, not deferred until some point in the future.

“The WOWcampaign would welcome a forensic review of all related Motability companies and their relationship with their contractors, as the group and commercial structure appears to be designed to be as opaque as possible.

“Surely disabled people should be assured that the charity set up to help them stay mobile and the plc that the charity subcontracted the day-to-day operations of the scheme to, are not ripping them off, because the surpluses being stored away by ‘Motability’ come out of the pockets of disabled people.”

Linda Burnip, co-founder of Disabled People Against Cuts, said: “None of this is anything new of course and John Mann brings these facts up year after year.

“I think the £2.4 billion is actually a massive amount to have and far more than is needed as a reserve to safeguard the scheme.

“It could be used in a variety of ways to help disabled people, for example, by scrapping the contentious rule that you must be in work, volunteering outside the home or in education [or caring] for 12 hours a week before you can qualify for a grant [for a drive-from-wheelchair vehicle], more help with grants generally, especially for wheelchair-accessible vehicles, and more help while people are waiting for a PIP appeal.”

Disabled Labour councillor Wayne Blackburn, from Pendle, said on Twitter that the scheme was “a lifeline for people with mobility issues – myself included – and it’s important that we ensure funds are being used properly and in benefit of disabled people”.

There was also anger on social media.

One disabled campaigner, @HovellingHermit, said: “This is a disgrace, they should be using the billions to reduce the payments being made by the disabled who need those cars to not just get to work or to study, but to hospitals, the shopping etc. They aren’t a luxury. Disgusted with #Motability.”

Another, Andrea Burns, tweeting at @Airheadange, said she was “speechless” and “disgusted” by the revelations, and that she had been forced to rely on “family and loans to keep independent” because it would have been “unaffordable” to secure the vehicle she needed through Motability.

But Helen Dolphin, a member of the Disabled Persons Transport Advisory Committee (DPTAC) [but not speaking on behalf of DPTAC] and an independent mobility consultant, said she believed MO was well-run and that the level of reserves was necessary because of the market for used cars, which “can fluctuate enormously”.

She said: “We would all like to be paid that, but we don’t run companies with thousands of members of staff and have all the things he has to deal with.”

She said the way the scheme had been run before Betts took over had been “a bit shoddy” and that he had “helped to turn it around”.

She said: “As a disabled person, all I want is a scheme that runs properly.”

Dolphin said that one of her biggest criticisms previously had been that the scheme had not done enough to fund adaptations for disabled people with high support needs.

She said: “They have done a lot in the past few years to fund a lot of standard adaptations, to provide grants for people who need bigger cars. A lot has been done to balance it out a bit.

“I think it’s well run. I don’t believe they would deliberately withhold that money if they didn’t need to.”

A Motability spokesman said last night (Wednesday): “You will not be surprised that we found the litany of inaccuracies in the exchanges in parliament last Thursday deeply troubling.

“The urgent question raised by John Mann MP, no doubt prompted by the earlier article in the Daily Mail, was in itself perfectly reasonable.

“However, because so many of the statements which followed in the parliamentary exchanges were, quite simply, untrue, the debate as a whole was deeply flawed and misleading.

“We will be writing to the secretary of state, and others who participated in the debate, refuting every single inaccuracy.”

The charity had said earlier: “Founded in 1977, Motability has always embraced public accountability and transparency, so we warmly welcome a NAO review and any wider scrutiny from parliament – as we did when the Charity Commission undertook a full review of the scheme last year.”

Motability Operations, which is owned by a group of UK banks, has insisted that its reserves of £2.4 billion are not held in cash but are “entirely invested in its fleet of around 630,000 cars”, which “protects the business against risk, notably in relation to price volatility in the used car market”.

It said that its executives are “paid for performance, according to targets set by the board and agreed with shareholders”.